8% of French people invest in crypto. Should I?

Ten years ago, hardly anyone had heard of cryptocurrencies and the word Bitcoin only meant something to the savviest of investors. But this has now changed and the number of people in France who have invested in cryptocurrencies has even surpassed those who own stocks.

5.56 million, 8% of the French, owned cryptocurrencies in 2021, according to a study by the Association for the Development of Digital Assets (Adan). That's more than the number of people who own stocks, which stands at 6.7% of the French population, according to the Autorité des marchés financiers (AMF).

Who are the French who invest in cryptos?

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But who are these French people who invest in cryptos? According to Adan's data, they are mostly men (60%) under 35 years old (46% of crypto holders). Another interesting fact to note is that people with incomes below €18,000 per year would also be more likely to hold cryptocurrencies (37% of investors) than those with the highest incomes. This figure should be tempered, however, as the wealth of cryptocurrency holders is difficult to assess.

In addition to those who already are invested, more people in France are close to joining them. According to the Adan study, 4 out of 10 French people would be interested in investing in cryptos if their bank would give them the option.

Does all this mean you should invest?

About the volatility of cryptos

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The first thing you should be aware of if you invest in cryptocurrencies is that their value is much more volatile than most other financial instruments. 

For example, since the beginning of 2021, the value of Bitcoin has fluctuated wildly. While the coin was trading at just under $30,000 in early 2021, its value exploded to nearly $65,000 by mid-April 2021. A few months later, by the end of July Bitcoin had seen its price halve to around $30,000, before rising once more to a record $67,000 in November and then plunging again. At the time of writing, Bitcoin is trading at $43,617, still up almost 60% since the beginning of 2021.

This rollercoaster pattern also applies to the second most popular cryptocurrency: Ethereum. Although its value has risen by almost 300% since the beginning of 2021, it too has had its ups and downs. The lesson you should take from this is that if you are investing in cryptos, it is best to think long-term and not get caught up in the panic or euphoria brought on by their high volatility. While trying to buy the dip (more on that here) is certainly tempting, it's not a guarantee of high returns either.

Diversification is the word

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Cryptocurrencies are particularly volatile. And while it is possible to win big, one can also lose a lot of money. To attempt to maximise protection against this risk, investors usually diversify their portfolio and invest in other financial instruments besides cryptocurrencies, such as stocks, precious metals or ETFs (you can invest in all of them from the Vivid app).

Limiting how much of your portfolio is dedicated to cryptocurrencies can help dampen the impact of volatility. . There is no set recommended amount, but a common number used by experts is limit the exposure to 10% of your total investments. This figure is actually in line with the overall behaviour of the French. According to the Adan study, 76% of French crypto investors say they spend less than 10% of their overall savings on crypto assets..

Research is the key

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The cryptocurrency world is vast and some misguided people try to profit from it by running scams. If you decide to invest in cryptos, be careful what you step into and watch out for products that are only meant to make you lose money (we tell you more about how to spot and avoid cryptocurrency scams here).

Another habit that savvy cryptocurrency investors have developed is to thoroughly research the coins they invest in. Most of them are backed by a specific project and many have different features or are based on different blockchains. At Vivid, we know that it can be easy to get lost in the jungle of cryptocurrencies. That's why we've written several articles to help you find your way around. Want to know more about the features of the most popular cryptos? We'll explain it all here. And if you want to explore the five cryptocurrencies we think are worth watching in 2022, check out our guide.